With public resources at an all-time low and demand increasing for better services, the public procurement function clearly needs to do more with less. Lean thinking provides an approach to do just that, while providing customers exactly what they want, when they want it.
Lean thinking encompasses tools and techniques to eliminate waste, along with goals and related process measures to monitor results, and standardized process improvement efforts. More importantly, lean thinking is a belief system for managing processes that focuses on adding value from the customer’s perspective. Lean thinkers are big-picture thinkers at heart and are constantly looking for new and improved ways to meet long-term strategic objectives of the organizations they serve. Lean thinking as an overall approach may offer a sustainable solution to the ever-increasing challenges associated with public procurement.
Lean thinking can trace its roots to automotive pioneer Henry Ford, who, in the early 1900s, developed a production system focused on high output, continually optimized workflow and elimination of waste. After World War II, Toyota engineers Taiichi Ohno and Shigeo Shingo built on Ford’s earlier work and developed what is known as the Toyota Production System. While Ford focused on producing millions of Model T cars at dozens of assembly plants around the world in exactly the same fashion, Ohno and Shingo created a series of production processes that were flexible, right-sized and capable of quick changeovers. Their processes were capable of efficiently producing small batches of a variety of different automobile models, just in time, as needed, without the overproduction (waste) associated with the Ford system.
Similar to the management approach first introduced by Ford and Toyota, lean thinking involves a central mindset focused on creating additional value (as seen by the customer) using the waste-elimination process. Lean thinkers focus on doing more with less (less human time, less equipment, less activities, less materials), while moving closer and closer to providing customers with exactly what they want, when they want it. Further, the resources that are freed up through the waste-elimination process are typically redeployed to more value-adding activities. The effect is to improve both process efficiency and effectiveness as seen in the eyes of the customer.
Focus on the customer is paramount. Lean thinkers do nothing without considering how their work affects the customer and how they can improve the overall effectiveness and efficiency of the processes they use to meet customer needs. Lean thinking, when applied in this way, underpins an organization’s culture and its employees’ way of viewing the work they do every day.
A variety of tools and techniques is used to put lean thinking into practice. In the manufacturing industry, techniques include the 5S approach, value-stream mapping, multimachine working, single-minute exchange of dies, single-piece flow, turn-back analysis and visual control. The service sector has also benefited from the application of a number of lean tools and techniques including just-in-time management, systems thinking, total quality management, root-cause problem-solving, 5Why and business process re-engineering.
Top-level management support is needed prior to engaging in any lean transformation effort. Invariably, lean transformation involves change, including changes to the core values and beliefs held by members of an organization or group, long-established processes, policies that guide decision-making and/or the way people work together. To facilitate these changes, top-level management must be fully supportive. They should set a clear vision for the organization or group focused on lean transformation and provide those involved with the time needed to learn and make incremental change. They should also celebrate successes, be tolerant of failures, create an organizational culture that supports experimentation and provide resources needed for training and development of those employees involved. In short, management must be committed to providing opportunities and incentives for employees to focus their talents and energies on satisfying customers. Another factor of concern is how the bureaucratic processes typical of public settings could impede ongoing change efforts. Therefore, management should focus on removing any barriers that would prevent learning or keep individuals from adapting organizational practices.
Once top-level support is in place and barriers to change eliminated, the focus should turn to development of performer-level commitment. People create results. Lean thinking will therefore not occur unless those responsible for doing the work are committed to making lean happen. Resistance should be clearly understood, as should the individual personalities involved, including the relationships that exist among people involved in the procurement process.
The next step is to quickly deploy these people to work on processes they manage in order to demonstrate how lean thinking works and what benefits are possible. They should:
identify the value stream associated with a particular purchasing process;
seek out waste and identify opportunities to create value;
move forward with rapid improvement events; and
use a measurement and control system to establish longer-term sustainability.
As a result, employees will increase their commitment and see that lean thinking is not a “fad,” but a sustainable way of managing their daily work.
While it is important to seek out and eliminate waste throughout a particular process, it is also important to identify ways to redeploy those wasted resources to other more value-added activities. Related to public procurement, for example, management of redundant or repetitive documentary-type activities could be automated or simplified, and the time saved could be spent on more meaningful activities.
Any reform effort needs to simultaneously address issues of accountability, transparency, fairness, economic efficiency and overall process effectiveness. In addition, the complex nature of the public procurement process makes coordination among stakeholders critical to successful implementation of strategies to promote improvement. The need to respond to conflicting interests and to deal with unforeseen problems requires an adaptable approach and openness to experimentation.
Joseph J. Schiele, Ph.D., is Assistant Professor of Operations Management, Oakland University, School of Business Administration, Rochester, Mich., and the Academic Director of the Pawley Lean Institute located in Rochester. Dr. Schiele’s work has focused primarily on issues related to the management of both manufacturing and service organizations and the improvement of public procurement practice. E-mail him at [email protected].